Rent Vs Buy Calculator

The most repeated piece of housing advice — 'stop throwing money away on rent and buy' — quietly assumes the answer. The honest framing is a break-even: how many years must you stay in a home before owning beats renting and investing the difference? Both paths start with the same money. The buyer sinks the down payment plus closing costs into the home; the renter invests that exact same cash. Each month, whoever pays less to keep a roof overhead invests the difference, so the comparison is apples-to-apples: the renter is not just 'wasting' rent, they are renting and investing everything they didn't spend on owning. Two forces decide the winner. Transaction costs — the closing costs to buy and the agent commission to sell — put the buyer behind on day one, often by close to a tenth of the home's value round-trip. Then time works for the buyer: the mortgage amortizes into equity, the home appreciates, and rent ratchets up every year while the owner's principal-and-interest payment stays fixed. So the buyer starts behind and slowly catches up, crossing the renter's net worth at the break-even year. Stay past it and buying wins by more and more; sell before it and renting plus investing was the better call. The simulator races a buyer's net-worth-if-sold against a renter's invested portfolio and marks exactly when — and whether — buying pulls ahead. The durable lesson: buying is a bet on staying put. The shorter your horizon, the higher mortgage rates are, and the lower the rent relative to the price, the longer that break-even — and the more renting and investing wins.

Free and interactive — no sign-up, nothing to install. Read the full lesson for the plain-language explanation.